BANKRUPTCY BEACH READING Bankruptcy Trivia–Answers Revealed

Thanks to all of you who participated in our first ever Bankruptcy Trivia contest. Although no one sent us an entry with 100% completely correct answers, we did select at random one lucky respondent to receive the complete Weil bankruptcy nerd swag package. (To protect that person from any suggestion of loafing off and spending time finding answers to the trivia, we will not release his or her name, but we can say that Weil employees were not eligible to win.)

Q. What is the only sports franchise to file for bankruptcy twice?

A. The Pittsburgh Penguins filed for bankruptcy protection in 1975 after the IRS seized their assets for failure to pay taxes. The Penguins had approximately $6.5 million in debts at the time of the filing, including $500,000 owed to the IRS. 23 years later, in 1998, the Penguins filed for chapter 11 protection. Upon emergence from their second bankruptcy, they were controlled by Mario Lemieux, who converted the approximately $30 million he was owed in deferred salary into equity in the franchise.

Q. After a certain grace period, early Roman law (i.e., the Twelve Tables circa 450 B.C.) gave a creditor the choice of selling a debtor into slavery or killing him. Regarding the latter remedy, what would happen if the debtor had more than one creditor?

A. If a debtor in ancient Rome had more than one creditor, the debtor’s body would be cut into proportionate shares for each creditor.

Q. What famous jurist is most often credited for coining the phrase “indubitable equivalence”?

Q: Who is officially considered the most litigious person in the world? Not only did this man sue the Guinness Book of World Records for naming him as such, he has also made appearances in numerous large debtor cases, including, in no particular order, General Motors, Philadelphia Newspapers, Chrysler, Pilgrim’s Pride, and Bernard L. Madoff Investment Securities. This man is also famously known for naming in a single complaint, among others: George Bush, along with his entire administration and various family members; the authors of the Uniform Commercial Code; the Pope; Jimmy Hoffa; the Magna Carta; the Taliban; Brad Pitt and his adopted son Maddox; the Nordic Gods; Fabio; and Fidel Castro.

A. Jonathan Lee Riches is a prisoner who is said to have filed more than 1,000 lawsuits in federal district courts.

Q: What provision of the Bankruptcy Code explicitly requires the bankruptcy court to consider the public interest in addition to the interests of the debtor, creditors, and equity interest holders in certain chapter 11 cases?

A. We had in mind section 1165, the provision under the Railroad Reorganization subchapter that directs the court and the trustee “to consider the public interest in addition to the interests of the debtor, creditors, and equity security holders” in applying certain sections of the subchapter. One respondent, though, pointed out that section 1129(a)(5)(A)(ii), which deals with individuals proposed to serve after confirmation of a chapter 11 plan as a director, officer, or voting trustee of the debtor (among others), requires that the appointment or continuance in office of such individual be “consistent with the interests of creditors and equity security holders and with public policy.” We also counted that as a correct answer.

Q. When did the first corporate reorganization occur in the United States?

A. The first corporate reorganization is often said to have occurred in 1846, when a Georgia state court appointed a receiver over the insolvent Munroe Railway Co. The receiver successfully reorganized the railroad as the Macon & Western Railroad. See Macon & W. R.R. Co. v. Parker, 9 Ga. 377, 389-92 (Ga. 1851).

Q. How many jurisdictions are subject to the EC Regulation on Insolvency Proceedings?

A. Although the EC has 27 members (each with its own insolvency system), Denmark is not a signatory to the EC Regulation on Insolvency. Accordingly, 26 member states are subject to the Regulation.

Q: Who (full name, please!) wrote the original Collier on Bankruptcy, and what was the treatise’s original title, subtitle, and year of publication?

A. The Pele of bankruptcy, we all just know him as Collier. In 1899, William Miller (coincidence?) Collier published The Law of Bankruptcy and the National Bankruptcy Act of 1898: A Treatise on the Principles and Practice of the Law of Bankruptcy as Embodied in the New National Bankruptcy Act.

Q. What is the name of the debtors’ prison immortalized by Charles Dickens?

Q. Which of the following people has not filed a bankruptcy petition? Toni Braxton, Lenny Dykstra, Soulja Boy, or Jose Canseco.

A. This was actually an unfair question as two of the listed stars have not filed for bankruptcy. Toni Braxton has filed for bankruptcy twice, and Lenny Dykstra is currently embroiled in a bankruptcy case in which he is defending against allegations that he committed federal bankruptcy crimes by allegedly hiding, selling, or destroying items from his home. Although Jose Canseco’s mansion went into foreclosure, he did not actually file for bankruptcy protection. And Soulja Boy? He’s had his share of legal troubles, but he keeps turning his swag on and has never filed for bankruptcy protection.

11 USC Sec. 1165
Sec. 1165. Protection of the public interest

In applying sections 1166, 1167, 1169, 1170, 1171, 1172, 1173, and 1174 of this title, the court and the trustee shall consider the public interest in addition to the interests of the debtor, creditors, and equity security holders.

11 USC Sec. 1129
Sec. 1129. Confirmation of plan
(a) The court shall confirm a plan only if all of the following requirements are met:
(5)(A)(ii) the appointment to, or continuance in, such office of such individual, is consistent with the interests of creditors and equity security holders and with public policy; and